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The War on Taxpayers

by Bruce Leonard

Inefficiency, antiquated weapons and a complicit Congress allow the military-industrial complex to fleece the American public.

When the Pentagon learned it possessed $16 billion of ammunition that was banned by international treaty or had become obsolete or unusable, the organization that oversees the United States military spent $1 billion to destroy it, according to a Government Accountability Office report. Some of the destroyed ammunition, however, may have been usable.

In order to warn the country about attacks by cruise missiles, drones or other low-flying weapons, the Pentagon spent $2.7 billion over the last 18 years on a system known as JLENS, which has repeatedly proven to be inadequate, according to the Los Angeles Times. And four missile-defense systems were scrapped after the military spent $10 billion to develop them.

The littoral combat ship (LCS) was meant to be the backbone of the surface combat fleet. However, according to the Center for International Policy, “The LCS is fundamentally under-armed, under-armored and under-crewed, giving it limited utility in littoral (near shore) waters and making it a non-asset in terms of surface combat strength.” In addition, each ship was supposed to cost $480 million to become “mission ready,” yet the first four ships cost $780 million each. One LCS, the USS Milwaukee, suffered a complete loss of propulsion and had to be towed to port 20 days into her maiden voyage.

In Afghanistan, “the Air Force scrapped half a billion dollars worth of transport planes meant for the Afghan air arm,” according to warisboring.com. And since 1997, the Pentagon has spent $32 billion on cancelled weapons programs, according to The Washington Post.

Only a few among many thousands, these examples show that whether expanding the nation’s territory, beating back the threat of communism, fighting the war on terror, cloaking themselves in the American flag or invoking national security, the military and multi-billion-dollar defense contractors continue to pick the pockets of U.S. taxpayers.

At the start of the 20th century, defense spending was about 1 percent of Gross Domestic Product (GDP). During World War II, it peaked at nearly 36 percent and has never been less than 3.5 percent since, according to the Congressional Research Service and usgovernmentspending.com.

Google Earth

Enough is enoughKnown as “the boneyard,” an Air Force Base in Arizona houses some 4,300 aircraft, some of which have never seen service.

After President Barack Obama proposed his first budget, politicians accused his administration of eviscerating the military. Yet in a 2009 speech to the Economic Club of Chicago, then-Defense Secretary Robert Gates, who served eight presidents, said, “In total, by one estimate, our budget adds up to about what the entire rest of the world combined spends on defense. Only in the parallel universe that is Washington, D.C., would that be considered ‘gutting’ defense.”

In order to slow down the rate at which the Pentagon burns through taxpayers’ money, Congress passed the 2011 Budget Control Act, which limits defense spending through fiscal year 2021. Yet the proposed 2017 budget, if approved, will still give $582.7 billion to the Department of Defense (DoD), including $58.8 billion for Overseas Contingency Operations (OCO), which funds fighting terrorism in Iraq and nation-building there, as well as the war in Afghanistan, the longest in U.S. history.

The OCO has been called a “slush fund” because it “provides the Pentagon with a relatively flexible source of funds that has been protected from legislated cuts made to all other federal discretionary spending,” according to the National Priorities Project. Even after the Budget Control Act, the military accounts for more than 50 percent of all federal discretionary funds.

FILLING UP ON PORK

When asked about wasteful military programs, Sen. Tim Kaine, a Democrat from Virginia, sent a boilerplate response via email that embraced the status quo and celebrated pork-barrel politics. It read, in part, “The 2017 budget shows a continued focus on protecting the homeland, building security globally, and projecting power to win decisively. I am pleased that the budget includes funding for Virginia shipbuilding, including $3 billion for the continuation of the Ford-Class carrier program and over $1.9 billion in funding for the refueling and complex overhauls of USS George Washington (CVN 73) and USS John C. Stennis (CVN 74).”

Kaine’s responsibilities, of course, include fighting for his constituents’ jobs, and he is certainly not the only politician willing to rubber-stamp any military expenditures that affect their states. For example, the late Sen. Daniel Inouye, a Democrat from Hawaii who spent two decades on the Defense Appropriations Subcommittee of the Senate Appropriations Committee, took pride in his ability to bring home the bacon.

Photograph by Cherie A. Thurlby/U.S. Department of Defense

SPEAKING THE TRUTHFormer Defense Secretary Robert Gates attempted to rein in military contractors, particularly Lockheed Martin, principal manufacturer of the costly and trouble-plagued F-22 and F-35.

“In total, by one estimate, our budget adds up to about what the entire rest of the world combined spends on defense.”

then-Defense Secretary Robert Gates

According to a book by William D. Hartung titled, Prophets of War: Lockheed Martin and the Making of the Military-Industrial Complex, Inouye described himself as “the #1 guy for earmarks.” “Inouye brought home over $206 million in 2009 alone. … In return, Inouye had received over $117,000 in campaign contributions since January 2007 from companies that benefited from his earmarks, with over half coming from Lockheed Martin,” according to Hartung.

Therein lies the problem. America obviously needs to defend itself against numerous dangerous regimes and organizations, and defense contractors will always participate in that process. Because Congress controls the funding, however, when politicians pass laws that keep themselves in office in exchange for campaign contributions while bandying around “patriotism,” “terrorism” and “national security,” the distinctions among defense, politics and commerce blur. And Americans have a right to be cynical.

In his book Duty: Memoirs of a Secretary at War, Gates wrote about speaking to senators who “made sure to acquaint me with the important defense industries in their states and pitch for my support to those shipyards, depots, bases, and related sources of jobs. I was dismayed that in the middle of fighting two wars [in Iraq and Afghanistan], such parochial issues were so high on their priority list.”

And referring to unnecessary engines for the controversial F-35 Joint Strike Fighter, Gates wrote, “Defense was spending hundreds of millions of dollars each year to support a program that, again, we didn’t want, didn’t need, and couldn’t afford. Facts and logic play no part in debates on the Hill when jobs at home are at stake.”

In Prophets of War, Hartung wrote, “As Harry Stonecipher, then Vice President of Lockheed Martin’s chief rival Boeing, put it in an interview with The Wall Street Journal, ‘the purse is now open,’ and ‘any member of Congress who doesn’t vote for the funds we need to defend this country will be looking for a new job after next November.’”

MORE THAN THEIR SHARE

Inefficiency, greed and corruption among the military and its suppliers have been rampant since this country’s inception, and defense has always facilitated commerce. In a letter to his brother in 1778, General George Washington railed against the suppliers who overcharged the Army, writing, “There is such a thirst for gain, and such infamous advantages taken to forestall and engross those articles which the army cannot do without, thereby enhancing the cost of them to the public fifty or a hundred prCt, that it is enough to make one curse their own Species, for possessing so little virtue and patriotism.”

On March 27, 1794, President Washington signed “An Act to Provide a Naval Armament,” which authorized the purchase or construction of six frigates. According to the book This People’s Navy: The Making of American Sea Power by Kenneth J. Hagan, the cost of the ships quickly doubled the amount Congress had appropriated for them. Because Algiers pirates had captured 11 U.S. merchant ships, Massachusetts Rep. Fisher Ames said, “Our commerce is on the point of being annihilated, and, unless the armament [of ships] is fitted out, we may very soon expect the Algerines on the coast of America.”

During the Civil War, “contractors had free rein in their sales to the government, sometimes with the assistance of greedy military men,” according to the New York Times. To fight this corruption, the House of Representatives in 1861 created the Select Committee on Government Contracts. Rep. Charles Van Wyck said the committee was necessary to counter “the mania for stealing … almost from the general to the drummer boy.”

The Senate Special Committee to Investigate the National Defense Program, known as the Truman Committee, was established in 1941 after Missouri Sen. Harry S. Truman traveled around the country to investigate spending on military bases and at corporations that did business with the government. Addressing the double standard he saw in the way Republicans thought, Truman said, “Every 10 cents that was spent for those relief projects … was looked into … but the minute we started spending all that defense money, the sky was the limit and no questions were asked,” according to Bruce S. Jansson’s book, The Sixteen-Trillion-Dollar Mistake. The Truman Committee is estimated to have saved the country $15 billion in 1940s dollars.

In the speech he gave before leaving office in 1961, President Dwight D. (Ike) Eisenhower said, “We annually spend on military security more than the net income of all United States corporations. …

“In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military-industrial complex. The potential for the disastrous rise of misplaced power exists and will persist.”

IKE PREDICTED THE PAST

Though Eisenhower warned the American people against a military-industrial complex that threatened to dominate the country’s future, he could just as easily have pointed to the corporate-driven imperialism and military buildup that had largely defined the previous six decades.

Major General Smedley Butler, the only U.S. Marine ever to be awarded the Brevet Medal and two Medals of Honor, spent more than 33 years in the Corps. In a 1933 speech, he said, “I helped make Mexico, especially Tampico, safe for American oil interests in 1914. I helped make Haiti and Cuba a decent place for the National City Bank boys to collect revenues in. I helped in the raping of half a dozen Central American republics for the benefits of Wall Street. The record of racketeering is long. I helped purify Nicaragua for the international banking house of Brown Brothers in 1909-1912. … I brought light to the Dominican Republic for American sugar interests in 1916. In China I helped to see to it that Standard Oil went its way unmolested.”

Having laid out the “why” of U.S. foreign policy, Butler described in his 1935 book, War is a Racket, how the politicians and corporations convinced soldiers to do their bidding: “Beautiful ideals were painted for our boys who were sent out to die. This was the ‘war to end all wars.’ This was the ‘war to make the world safe for democracy.’ No one mentioned to them, as they marched away, that their going and their dying would mean huge war profits. No one told these American soldiers that they might be shot down by bullets made by their own brothers here. No one told them that the ships on which they were going to cross might be torpedoed by submarines built with United States patents. They were just told it was to be a ‘glorious adventure.’”

Military expansion has continued to grow exponentially. According to the website POLITICO, “Despite recently closing hundreds of bases in Iraq and Afghanistan, the United States still maintains nearly 800 military bases in more than 70 countries and territories abroad—from giant ‘Little Americas’ to small radar facilities. Britain, France and Russia, by contrast, have about 30 foreign bases combined.”

Retired Army Col. Lawrence Wilkerson, former chief of staff for former Secretary of State Colin Powell, decries America’s unprecedented military expansion. In an email to Freedom, Wilkerson said the fact that the U.S. spends so much on defense relative to other countries “should tell the American people that their tax dollars are ill-used and their national security budget is far in excess to the nation’s security needs. That budget is now over one trillion dollars annually. That’s [Department of Energy’s] nuclear program, [Veterans Affairs’] veterans support, the intelligence community’s budget, [Department of] State’s international affairs budget, and DoD’s funding. We could cut that budget 100 billion per year for a decade, saving a trillion dollars, and we would improve our national security, not hurt it, and we would free up dollars for much-needed other tasks, such as refurbishment of our crumbling infrastructure—bridges, roads, water systems, and so on.”

BREAKING THE LAW

The Chief Financial Officers Act of 1990 requires that every federal agency be audited. The Pentagon, however, has never been subject to such financial scrutiny, “leaving roughly 8.5 trillion in taxpayer dollars unaccounted for since 1996, the first year it was supposed to be audited,” according to a 2013 investigation by Reuters. Every time Congress approves another defense budget, the DoD breaks the law and avoids accountability for its wasteful practices.

Each branch of the military employs its own accounting systems. In fact, the DoD uses as many as 2,100—and perhaps as many as 5,000—separate accounting systems, very few of which communicate with each other. The Air Force, for example, spent seven years and $1.03 billion on the Expeditionary Combat Support System (ECSS), which was supposed to replace hundreds of outdated systems so that it could track hardware. In 2012, the Air Force killed the program because it proved to be “no longer a viable option.”

Photograph by Steve Russell/Getty Images

A VOICE OF REASONRetired Army Col. Lawrence Wilkerson, former chief of staff for former Secretary of State Colin Powell, says the military-industrial complex determines many of America’s political decisions.

The Reuters investigation determined, “The lack of reliable accounts—Pentagon staff routinely insert billions of dollars a year of false accounting entries to cover missing information—conceals huge sums lost to waste, fraud and mismanagement.”

A report by the Defense Business Board said the Pentagon’s logistics systems “have contributed to longer lead times, excess inventory and stockpiling, duplicative activities and systems, inadequate performance measurements, and increased costs.” And the Defense Logistics Agency, which orders, stores and distributes supplies for all branches of the military, built an accounting system that cost more than $2 billion. The system could not produce financial statements required for an audit, according to a DoD report.

In addition to the Pentagon’s logistical labyrinth frequently causing active service members and veterans not to be paid, it also violates the Arms Export Control Act. This law requires the DoD to obtain assurances that armaments will be secured by those countries it supplies with weapons. Yet the Defense Security Cooperation Agency that monitors those shipments has been unable to keep track of hundreds of thousands of weapons, including tanks, in Iraq. Patrick Wilcken of Amnesty International stated in a report that the terrorist organization ISIS has received a “substantial portion” of its weapons from Iraqi army stocks.

Rep. Mac Thornberry, a Republican from Texas, told Military Times that service members have said they have to buy supplies themselves, because if they were to order routine items, they would arrive in three to four months, if at all. “You have folks out there doing their job and they can’t get a pen from the federal government procurement system. It just makes you think, ‘My gosh, can’t we do better than this?’” Thornberry said.

Of the Pentagon’s lack of accountability, Wilkerson said, “It is reprehensible that the Congress continues to allow the DoD to escape this statutory requirement to tell the American people where their tax dollars are going.”

FROM TOILET SEATS TO AIRCRAFT CARRIERS

Defense contractors have been pilloried for producing $600 toilet seats and $7,000 coffee pots. Though he did not want to go on record, a former employee of McDonnell Douglas, which was purchased by Boeing, explained to Freedom how costs rise and how the process can change. “If I were trying to reduce contract costs, I’d look at eliminating cost-plus contracts, which encourage overruns. Better to have fixed-price contracts where feasible. I’d also look at the military tendency to add new requirements as the design progresses, which increases costs. And I’d have a secondary contract winner to act as a second source to keep the primary source honest and not jack up prices,” he said.

“We could cut that budget 100 billion per year for a decade, saving a trillion dollars, and we would improve our national security.”

retired Army Colonel Lawrence Wilkerson

Of course, he has retired from the industry, so he doesn’t have the vested interest he once did in maintaining the status quo. Because trillions of dollars are at stake, the military, defense contractors and many members of Congress seem only to give lip service to the idea that pork should be cut, waste should be eliminated and the parties involved should be held accountable.

One senator who does care, however, is John McCain, a Republican from Arizona. He was an outspoken critic of the much-maligned F-22 Raptor aircraft and is not a fan of the F-35, produced primarily by Lockheed Martin.

On the Senate floor, Sen. McCain said, “When we look at a program such as this, where it exceeded its original cost estimates by more than $15 billion and more than five years of delay, and there are still problems with the most expensive weapons system in history, and the first time $1 trillion is being spent on one weapons system, we need to do a lot better.”

Yet improving would require the process to change. As stated in Prophets of War, “The first 350 F-35s were going to be produced before full testing had occurred. The maxim of ‘fly before you buy’ had been violated in yet another program, with costly consequences for the budget as well as for the product’s performance.”

Hartung told Freedom that what Lockheed Martin usually does is “bid a little lower than they know it will cost,” then the company makes money on cost overruns and award fees. “They manipulated the system,” he said, referring to the F-35 promotion, acquisition and production process.

Photograph by Lockheed Martin

SKY-HIGH COSTSThe F-35 Fighter will cost $1 trillion, the most expensive weapons system ever developed. Because of repeated failures, they may not be combat ready until 2022.

In order to decrease the exorbitant costs and prevalent waste generated by the military-industrial complex, Hartung said, “You would need a more assertive Congress or a president who really made it his or her business to make this a priority.”

Speaking to the Senate, McCain said, “Unless we fix this cost-overrun problem, the American people will stop supporting spending money on defense. That is just a fact. It is time we in Congress exercised much greater oversight, much greater scrutiny, much greater questioning, both before, during and after the acquisition process.”

However, Michael O’Hanlon, a senior fellow at the Brookings Institution who has written extensively about the military, told Freedom that considering the enormity of the Pentagon, he doesn’t consider the DoD to be “super wasteful,” and he thinks nearly all of the weapons systems are worth their costs.

Yet in Duty, Gates acknowledges that the Cold War is over and warfare has changed, diminishing the need for aircraft carriers and nuclear weapons. “In fact, after Vietnam, when we used our military—in Grenada, Lebanon, Libya (twice), Panama, Haiti, the Balkans, and elsewhere—it was usually in relatively small-scale but messy combat.”

STARTING FROM SCRATCH

Wilkerson believes the way the Pentagon operates needs to be overhauled. “New technologies such as [artificial intelligence], robotics, nano-engineering, 3D-printing … allow hundred-thousand-dollar weapons to defeat these hugely expensive legacy systems. So-called ‘drones’ swimming under the ocean surface, for example, and amply armed with mines and missiles, can hunt out and destroy the billion-dollar systems such as carriers and subs. … But these legacy systems are built by the big, influential defense contractors. The drones are built by small, innovative start-ups. Therefore, the large contractors, who have Congress in their back pockets, fight to prevent these developments.”

In Duty, Gates suggests methods by which the Pentagon can bring down costs: “Wherever possible, build prototypes of new equipment, and don’t start production until testing is complete and problems have been resolved; freeze requirements early in the process … demand accountability—be willing to fire government project managers or contractor managers if programs go off the rails; finally, the secretary of defense has to get his (or her) hands dirty overseeing all this, getting knowledgeable enough about the big programs, and keeping up to speed on progress to be able to know when to blow the whistle if things go awry.”

Based on the history of the military-industrial complex, though, the powers that be don’t seem likely to adopt Gates’ suggestions. Wilkerson’s belief that the country’s political decisions are driven in large part by the military-industrial complex may be more realistic than cynical.

“One of the reasons that the Clinton administration wanted to expand NATO—and this after the previous President H.W. Bush had promised Gorbachev that we would not expand the alliance—was to allow U.S. defense contractors who were heavy contributors to the Democrat’s campaign coffers and [Political Action Committees] to have more countries to which they could sell their weapon systems like the F-16 and ballistic missile defense,” Wilkerson told Freedom. “The NATO expansion is strategically ludicrous in military terms. … Imagine, for example, a Russian attack on Georgia to which the American people would support an armed response. Yet that is what Article V of the NATO Treaty calls for. It’s absurd to think Americans would support such a response.

“So, one has to ask the fundamental question: If the expansion of NATO is not for national security—indeed, is counter to that security—then what is it for?”